Trading Places

Posted on March 19th, 2018

by Rab Bruce’s Spider

One of the few remaining arguments Project Fear has to counter the Indy movement is that of what they incorrectly term the question of trade within the UK single market. That’s as meaningless an expression as the German single market, but let’s put that aside and take a look at the choices which would face Scottish voters who decided to base their choice for or against independence solely on the question of trade.

To begin with, the argument for staying in the Union would result in trade continuing on an internal UK basis, with standards imposed by the UK. This would effectively mean that Scottish businesses could continue to buy and sell (they won’t technically be imports and exports within a unitary state) as they do at the moment within the UK. It would also give access to genuine import and export markets via the wonderful new trade deals the UK will do with the rest of the world. That’s provided you believe the claims of the Tory Government. But bear in mind that several countries have already told the UK they are not interested in doing deals unless they get favourable terms. Favourable for them, that is, not for the UK.

What this would cut off, though, is any chance of exporting to the EU if the UK’s standards of production were lower than those required by the EU. The way the Tories are talking, it’s a fairly safe bet that they will be.

So this scenario gives a reduced export market, dearer imports from the EU and possibly some opportunities for trade with other countries. Or possibly not. By the UK Government’s own admission, a post-Brexit Scotland within the UK would suffer an economic downturn on a massive scale. Still, at least you’d be able to put a Union flag brand on any goods you produce, so some people might think it is worth it.

The second scenario is that Scotland becomes independent and remains within the EU. This is the one Project fear will focus on because it will mean a hard border between Scotland and England. This prospect will no doubt terrify many voters, but we need to consider whether it has any upside.

For a start, trade will not stop altogether. The EU trades with plenty of countries around the world, and some EU nations even agree individual deals provided the third party nation conforms to EU standards. Cross border traffic will not cease although it may well become a significant hassle until proper smart border technology is put in place. There would very likely be tariffs imposed on goods going in both directions, and we should not forget that, if Scotland takes the sensible option of adopting its own currency, importers from England are likely to benefit as the value of the Scots pound increases, while those exporting to England may see a decline in demand. However, let’s not forget that demand for Scottish foodstuffs in particular is very strong in England. Provided their economy does not collapse too far, there is likely to be a continued demand for such things as whisky, beef and fish.

On the plus side, England would continue to trade with Scotland on the same terms as it agrees with the rest of the EU. Scotland would avoid the post-Brexit economic slump and would retain access to the rest of the EU markets plus any worldwide markets where the EU has been able to negotiate terms based on the third party nation having access to 28 EU nations.

So, border hassles would be an issue, but the upside makes this option considerably more favourable than the first one. Let’s not forget that the border would be constructed at England’s behest, not Scotland’s, and England would suffer just as much as Scotland would. As for the frequently implied threat that trade would virtually stop, this is nonsense because it suggests that England will trade with the rest of the EU but not with Scotland. The EU would simply not agree to that.

It is also worth bearing in mind that the UK’s capacity to actually impose a hard border has been brought into question as far as the Irish border question is concerned, and we have even had the UK’s Transport Minister, Chris Grayling, stating quite categorically on BBC Question Time that there are no circumstances under which the UK would impose a hard border to check lorries entering the UK via Dover. That seems a quite bizarre statement from someone supposedly representing a Government which wants to take back control of its borders, but he said it and we must suppose he meant it; always remembering that he is a Tory politician so his words cannot be fully trusted. But still, if there is to be no hard border in Ireland and no hard border on cross-Channel ports, why on earth should we believe that there would be a hard border between Scotland and England?

For the third option, let’s assume Scotland becomes independent and stays outside the EU. This is perhaps one that a not insignificant portion of the 2014 Yes vote would favour. It would allow us to do a trade deal with England, certainly, but it would mean also needing to do a deal with the EU. If we maintained higher production standards than those required in England, this would be perfectly possible, but whether a small nation like Scotland could get a good deal against 27 other countries is perhaps debatable. It might depend on how keen they are on whisky.

The important thing to remember in all of these is that trade will not stop. It is the terms of trade which will alter, and the ease with which goods can be imported and exported which will determine how our economy develops. Quite frankly, under the first option, that of remaining in a post-Brexit UK, our economy is not going to develop at all. The option of remaining in the EU as an independent country certainly presents some cross-border issues, but it does mean that we retain the ability to grow our economy and forge our own place in the world of international trade. The final option, of leaving the UK and the EU is very problematic in the short term. It would, I believe, be more sensible to stay in the EU until we see whether Brexit England is able to make a success of being outside the EU. If, in due course, we decide to quit the EU, then at least that would be our decision, not one which has been imposed on us by our neighbour.

It is also very important to remember that, while trade is an absolutely vital part of the equation, it is not the only one. Things like Human Rights and freedom of movement will also come into our decision. The thing is, the UK has no argument on matters like that since it wants to scrap or dilute them, so you won’t ever hear a Unionist mention them. All they’ve got is trade and, quite frankly, the way they are messing up their current negotiations, we should be very wary indeed of sticking with them.

Rab Bruce's Spider is a collaborative blog site where individuals who support Scottish Independence can express their views. If you would like to contribute, please email your suggested article to ga.author@sky.com.